In China, the recent reclassification of the country into urban areas has led to an increase of urban population that is to a large extent purely administrative. To set a standard for differentiating the population into urban and rural, it is necessary to formulate a scientific standard. The author considers the problems and contradictions created by the differentiation of population according to cities and towns which are administratively established. Newly established cities and towns are comparatively large in number and their sizes are much expanded because a certain amount of agricultural population is included in the urban population. A survey of 347 cities revealed that on the average, the agricultural population accounted for 47% of the total. It is important to set the principles for standards of differentiation of the urban population with a view to the origin of the city. All the economic, social, and administrative principles have limitations, and no one set of principles can be used by itself to decide whether or not an area is urban. The standards should be based on actual conditions within China itself.