The article describes transformations accomplished in the agricultural sector of the People's Republic of China. Reforms launched at the end of the 1970s have changed considerably the shape of that country. The introduction of the system of accountability of farms and the reform of the planning system have improved the situation of China's rural community. Owing to the creation of local enterprises a considerable part of Chinese peasants has found employment outside the agricultural sector. However, these specific institutions of Chinese transformation have not produced a result in the form of diminishing discrepancy in the incomes of the urban and rural population. On the contrary, these disproportions are becoming more and more evident. One of the causes of this problem is the system of the farms' registration known as 'hukou'.