China's agricultural sector employs about half the country's working-age population. How fast living standards in China improve depends largely on the nation's success in moving people from agriculture to industry. In some ways, China resembles the U.S, economy of more than a hundred years ago. The U.S. filled its factories with workers fleeing the farm, as well as immigrants. Living conditions were often terrible, especially in the teeming urban slums, but labor followed the jobs as agriculture retreated and industry advanced.
China faces the same challenge.
It has removed many barriers to labor mobility during the reform era. For example, before 1984 rural Chinese weren't supposed to leave their villages for work. That's no longer the case, and in 1999 it's estimated that some 100 million workers had left their official place of residence to work in larger cities. But many economists believe the barriers to a free-flowing labor market remain too high. They are also largely barred from the health care and education commonly available to city residents.