Although there are at least three million mingong in Shanghai, their dire conditions are such an embarrassment to the government and the companies that employ them that it was easier for this journalist to arrange an interview with the mayor than it was to get permission to enter a construction site and speak to one of them.

Courteous, scrawny and fond of window shopping, Zhang Wanwei does not appear to be a threat to the Chinese government. Persuaded to chat for a couple of hours over a hotpot and a beer, he makes it clear that he can endure anything for his triple priorities; family, money and a car.

Compared with most of his fellow migrant workers, Zhang is in an enviable position. Having worked in Shanghai for several years (salaries here are more than 10% higher than the national average), he has found a "good boss" who provides free uniforms and washing powder as well as paying for basic medical treatment. He also has a semi-skilled job that pays twice as much as the simple labouring duties given to newly arrived migrants, who get only 30 renminbi (£2) a day.

Socially, however, he is as much of an outsider as ever. Anhui is a neighbouring province, but young Shanghaiese would rather mix with people from Japan, America and Britain than their compatriots. Despite his many years in the city, Zhang says he has never made a friend from Shanghai, and neither has any of the other migrant workers that he knows.

"We live in different worlds," he says. "If I ask the locals for directions, they answer politely enough. But I can tell they look down on me."

The mingong are the little people of China. They are recognisable not only by their work clothes, but by their smaller stature - they are usually several inches shorter than most urbanites - and their weight, which never approaches the obesity of increasing numbers of city dwellers. Such is the discrimination against these Lilliputians that it is common for job advertisements to specify minimum height requirements.

The gap between city and country is a historical problem, and movement between the two is the ultimate revolutionary act. In the sixties, Mao Zedong disastrously tried to bridge the two worlds when he sent urban intellectuals to work as farmhands. In the 80s, Deng Xiaoping successfully tried the reverse: unleashing the biggest and fastest migration in history as, over 15 years, more than 110 million peasants moved into the cities in search of temporary work.

The story of modern China is the story of that movement. Low-paid, routinely abused and often working in appallingly unsafe conditions, these migrants have provided the human fuel for China's spectacular economic growth. In the cities, they now outnumber urban workers.

To understand why Zhang can endure such a life, you have to see where he has come from. Starting with concrete flyovers and ending with dusty, bumpy roads, the route from Shanghai to the small village of Nahi in Anhui takes you back along the route that China has roared along this past 20 years.

Migrants usually only make the journey for the spring festival, when they return home as heroes with stripy nylon bags full of gifts for their familes and envelopes containing their savings (in Zhang's case, about 95% of his wages). This annual migration is bigger than the hajj, its financial impact enough to make or break a mid-sized country. In Anhui alone, 7m of the 64m population return from mingong jobs outside the province. They take back salaries of 30bn renminbi - more than the provincial budget.

In Nahi, Zhang's money has transformed him from labourer to contractor. He is having a three-storey wood and brick house built for his largely absent family. It is one of a whole row of new homes being constructed with migrant money. By Shanghai standards, they are rough - no running water, no heating, and a cesspit shared with neighbours. But there are touches - a flowery glass lampshade, a DVD player - that show the family is moving up in the world.

"You must think we are very poor," says Zhang's father, Yongke - a Communist party member - as he treats his first foreign visitors to a humblingly lavish feast. "But you must realise what it was like before. When I was a child, we had a roof, but no walls. Even 10 years ago, bicycles were so rare here that everyone stared in wonder when they saw one. Now, we don't bat an eyelid when we see motorbikes. Things are going well. Mark my words, one day, someone in this village will have a car."

There are many contenders to be the first driver. More than a third of the male villagers have left for the cities. So have most of the young women. Exactly how many people have made the move from city to country is unclear. By one account, Shanghai has a population of 16.3 million. By another, which takes in an estimate of unregistered migrant workers, the number is close to 20 million.

For most of the past decade, everyone seemed to benefit as peasant labourers helped China to become the workshop of the world, churning out two-thirds of the planet's microwave ovens, half the clothes and a third of the computers. Since the start of the economic reforms, the government estimates that 270m people have been lifted out of poverty. Morgan Stanley estimates that their paltry levels of pay have also saved US shoppers $100bn.

But not everyone is doing so well. China is becoming a divided and unbalanced country. The faster the country has grown, the more the gap has opened up between the urban rich on the east coast and rural poor in the western interior. Instead of one country and two systems, China increasingly resembles one system, two countries: rich and poor.

Although it is nominally communist, inequality has been growing in China at an alarming rate. According to the government, the ratio of urban to rural wages has hit a record four to one. In many cases, the gap is higher: In Shanghai, average urban incomes rose last year by 14% to 14,800 renminbi (£1,000) per year. In Anhui, the rural equivalent was seven times less - 2,100 renminbi.

Last year, for the first time in 20 years, there was also a nationwide rise in abject poverty: 800,000 people were added to the population subsisting on less than 2 renminbi (15p) a day.

Part of the reason has been the abuse of mingong. This autumn, Zeng Peiyan, a member of China's state council, revealed that migrant workers were owed more than £25bn in unpaid wages, some of which had been withheld for 10 years.

"China has developed quickly thanks to the migrants, but few of the benefits have been passed on to them," says Robin Munro of China Labour Action. "Their salaries have barely risen in the past decade and they continue to suffer from very low safety standards."

According to the People's Daily, the party mouthpiece, the problem of peasant poverty is a "life or death" issue for the Communist party. There are signs that it may already be losing its grip on the provinces.

Last year, the government said the number of civic disturbances rose 14 % to 58,000, involving more than three million people. In the past month alone, police cars were torched by a mob of 10,000 in Chongqing, a demonstration by 100,000 forced the postponement of a dam project in Sichuan, and at least 12 people were killed in ethnic clashes in Henan.

Wen Gaodi, the Anhui-based author of an influential book on the plight of China's peasants, said protests had become so common in his city that the roads were blockaded about once every three days in his city. "Every city except Beijing has demonstrations now. The government faces a very difficult situation," says Wen, whose work is said to have sold 6m copies since being banned by the government. "The biggest problem facing China is how to get equal rights for peasants."

The current leadership appears to agree. Since taking power last year, president Hu Jintao and prime minister Wen Jiabao say their priority is "balanced development". They have lightened the unfair tax burden on peasants, abolished police round-ups of migrant workers, and tightened penalties on building firms that fail to pay their employees.

Zhang, a homesick optimist, agrees that things are better than in the past. But he is more concerned about looking forward. "I just want to save up enough money to go home and start my own business," he says. "I reckon I need about 100,000 renminbi, which means I have to keep working here for at least 10 years more. "One day I'm going to buy a car. I don't care if it is big or small, as long as it is mine. I can do it one day. I know I can."

Who would bet against him? This is a restless land, where nothing is certain and everything is possible. Zhang's triumphant trip home in his village's first car would be as good a sign as any that the gap between the two Chinas can close as well as open.