The paper specifically looks at the rural-urban interaction and contribution of various entities or agents to the total employment in China, rural China, and urban China. The study concentrated on the total employment after 1978 reforms. The paper looked at the 1978-2004 reform and after 2004 reform. It was revealed that 1978-2004 reform hindered the flow of labor from rural to urban but after 2004 reform promoted the flow of labor force from rural to urban China the development, which resulted in a drastic reduction in the rural labor force. Before the reforms, state- and collective-owned units were the only entities that were employing people in China. Even though private enterprises were allowed after the reforms, the leading role of the state- and collective-owned units persist. State-owned units contribute immensely to the total employment in China and urban employment, but its contribution to employment in rural China is negative. Collective-owned and cooperative units show a positive contribution to employment in rural areas but its contribution to the total employment in China is negative. Units with funds from Hong Kong, Macao, and Taiwan and rural private enterprises also contribute positively to total employment in China. Cooperative units, joint holding corporations Ltd., foreign-funded units, and rural self-employed individuals contribute negatively to the total employment in China. Collective-owned and cooperative units contribute negatively to employment in the urban areas. Urban and rural private enterprises and rural self-employed individuals contribute positively to urban employment.
Keywords: China; Collective-owned; Employment; State-owned.