Chapter 11 – Intensified Reform of the Labor Market and Abolishment of the Rural-Urban Divide

In the early 1990s, the objectives for reform of the socialist market economy were established, within which building contractual labor relations and cultivating the labor market were two key elements. The Rural-Urban Divide system consists of several related institutions, in which the hukou system and urban labor system are basic arrangements. During the period of rural reform, peasants received economic rights in job searching and doing independent business, hence it became possible for them to leave agriculture and go into cities. New policies for rural migrants clearly state rural migrants' status as the subject of a contractual labor relationship, and require all enterprises to sign and implement a labor contract when recruiting rural migrants and to establish labor relationships with defined rights and obligations. In cities, the general trend has been for the segmentation and inequality effects of hukou status to diminish over time. Keywords: hukou status; labor contract law; labor market; reform; rural migrants; Rural-Urban Divide system