text: Urban-rural divide The early PRC era saw a widened urban-rural disparity. The enforcement of the household registration system (hukou) classified Chinese citizens into the agricultural and non-agricultural population. The system made all migration from the countryside to the city require approval. People with urban registrations enjoyed a series of privileged access to social welfare that the general agricultural population could not get, including better access to food and other consumer goods, low-cost accommodation, education, and other public welfare. However, these urban privileges were based on the state's extraction of resources from the countryside. The state organized rural people into people's communes and implemented the Unified Purchase and Sale system to compel the rural people to sell grain at a fixed low price to the state. The unequal distribution ultimately led to significant differences in people's living standards and social welfare between urban and rural areas. In the late 1950s to early 1960s, the compulsory state procurement of grain under the unified purchase and sale system prioritized urban over rural areas in allocating basic necessities. The net state procurement kept increasing from 14.9 percent in 1956 to 28 percent in 1959. The urban-biased system of food production and rationing system left a much-starved countryside. This is known as the Great Famine.
  Apart from unequal access to social welfare and basic necessities, urban bias also lay in the pattern of state investment. The state targeted less at the development of agriculture than industrialization. Although the state investment in agriculture increased during the Famine, it went through a general downward trend in the 1960s and the 1970s. Income and consumption of the urban population increased faster than rural dwellers until the late 1970s. From the late 1950s to the mid-1970s, the income and consumption gap was widened significantly. Economist Thomas Rawski estimates the ratio of urban-rural per capita income to be 3.4 to 1 or 5.9 to 1 in 1978. Economist Carl Riskin estimates the ratio to be between 2.5 and 3. Rural people generally had to acquire a more austere taste for luxury products such as bikes, wristwatches, and sewing machines. The World Bank reports the income ratio to be 2.2 to 1 and the consumption ratio to be about 2.6 to 1 with higher ratios for luxury goods, such as watches, bicycles, and television sets.