Abstract: The urban-rural separation has been weakening with the hukou system reform. However, a new type of urban-rural separation has been emerging among young generation, which has brought about social and economic differentiation of the youth population. The original urban-rural separation had located in the border between urban and rural areas but now it has been moving into urban society, and establishing new social barriers among the people living in the city. This shows that the urban-rural inequality has not eliminated with the weakening of the hukou system, on the contrary, the urban-rural inequality has been transferring from older generation to the young generation. By this way, urban-rural inequality has been reinforced as a kind of class inequality.