In the nearly three decades since the inception of reforms, the
structure of China’s labor force has been fundamentally transformed. In
1978, an overwhelming majority of the labor force was either employed as
agricultural workers in rural communes or as employees in urban stateowned
enterprises (SOE), with virtually no labor flows between the rural
and urban sectors. By 2004, however, over a third of the rural labor force
had moved into nonfarm activities (see Table 1), and about three-quarters of
the urban labor force had found employment outside of the state sector, in
urban collectives, joint ventures and private enterprises (see Table 2).
Today, there are more than 100 million rural migrants working temporarily
in cities, establishing a direct connection between the rural and urban labor
markets.