Contemporary China is in a process of transformation from a traditional agricultural and rural society to an industrialized, urbanized, and modernized society. In 1978, China started to reform and open up, and the transition from the planned economic system to a socialist market economic system got underway. Over the past 25 years, the reform of the economic system continues to deepen. The ownership structure has changed from single public ownership to a system of mixed ownership in which a variety of economic elements develop side by side, with public ownership as the mainstay. The industrial structure has also undergone profound changes and the national economy continues to develop steadily and rapidly. In 2003, China’s GDP exceeded 11 trillion yuan, eight times more than that of 1978, with an average annual increase of 9.4%. The economic aggregate has leaped to sixth place in the world. Along with the economic development and changes in the economic structure, the social structure has also undergone profound changes, including changes in the employment structure and urban-rural structure. The structure of social strata – comprised of the working class, the peasantry, the intellectuals, and cadres – has gone through differentiation. Some social strata have become smaller in scale, and others have expanded through the differentiation. The status of some social strata has been improved, whereas those of some other strata have declined. In the meantime, some new social strata have emerged. The whole structure of social strata is moving in the direction of pluralism. The mechanisms of social differentiation and social mobility have changed, the channels of social mobility have increased, and the pace of mobility has accelerated. The political and economic relations between various social strata have undergone and are continuously going through various changes. The entire social structure is evolving in the direction of a modern structure of social strata compatible with the socialist market economic system.