Poverty within China is the most prevalent in remote rural areas. Income inequalities that exist between eastern and western China have grown larger, and the income gap that exists between urban and rural areas has also grown significantly apart since the 1970s. It is also found that urban incomes are over three times greater than that of rural incomes. 
Rationale behind the Hukou system
Implemented in 1958, the main rationale behind this system is to limit the migration to urban areas, as it is problematic when a huge population migrates to one dominate area, leaving the rural areas less populated, and thus causing an imbalance in the population. The system was implemented because of shortages and to lower cost mainly for the factories. In later years, it would serve to collect and manage the information of citizens, which is useful in monitoring them.
Oppose the Hukou System
There are many problems with everyone migrating to one dominate area, leaving the rural areas less populated, hence an imbalance in the population. As many people may see a fit to a new life, they still need the permission of the Chinese government, which is extremely difficult to attain if you want to move to the rural areas. Reasons such as shortages and lowered cost for factories do not justify the need for the continued existence of the Hukou system.
Inadequacy of the Hukou System
The system itself does not serve its purpose well at all. It was originally used to keep track of every resident as a way of maintaining control over the population. The system worked well under the emperors and Mao because most people spent their entire lives living in one place. These days the system is outdated and inadequate in dealing with all of the people moving about in search of jobs and opportunities. Moreover, with the increase in mobility of the population, people from rural areas are free to move around. However, just because they lack an "urban Hukou," they are forever designated as "temporary residents" and suffer all the social injustices such as denying them of public goods such as subsidized public housing, public education beyond elementary school, public medical insurance and government welfare payments.
- ↑ Rural poverty in China. Retrieved April 23, 2012 from http://www.ruralpovertyportal.org/web/guest/country/home/tags/china
- ↑ http://www.china-mike.com/facts-about-china/facts-rich-poor-inequality/
- ↑ http://benmuse.typepad.com/ben_muse/income_wealth_distribution/