The purpose of this article to investigate the working and living conditions of teachers under China’s market economy, with a focus on urban and rural schools. This paper is a case study of teachers in Hunan province, representing Central China. A total of eighteen teachers in seven different schools participated in the study.

The analysis of data shows that teachers experience change of teaching as reflected in the shift to learner-centred approaches, as well as changes of curriculum, textbooks and teacher evaluation. Under market economy, Chinese educational system still possesses urban rural inequalities, for the same or different reasons. The urban rural gap is reflected in teachers’ living and working conditions including salary, benefit, pension, available teaching resources, and school environment. It is also reflected in the opportunities they have.