China Past Due: Hukou ‘Economic Apartheid’

The residence permit system was enacted in the 1950s, as part of the Communist Party’s plan to rapidly industrialize the economy. It effectively set up an economic apartheid system — forcing rural residents to stay where they were, and work to support urban workers, who were in the state enterprises getting a full range of social services (albeit low pay) in service of the goal of helping China become an industrial power.