The Hukou system is real. It classifies citizens as agricultural/rural (nong) or non-agricultural/urban (shi). Rural hukou holders in cities face restricted access to local public schools, healthcare, pensions, housing subsidies, and jobs compared to local urban hukou residents. Status is inherited and hard to convert, especially in major cities. Reforms exist but disparities persist. It's often compared to a caste system for its birth-based barriers, though not identical to India's. Sources: Wikipedia, academic studies, and policy reports confirm this.