Tens of millions of migrant workers who are helping to fuel China's booming economy are being treated as an urban underclass, Amnesty International says.
Migrants miss out on many benefits permanent city residents enjoy
Despite some reforms, they are often denied rights to adequate health and education services and are vulnerable to exploitative working conditions.
As many as 200 million people in China have moved from the countryside to cities in the past two decades.
A controversial residency system is a key part of the problem, Amnesty says.
Migrants moving from rural to urban areas are required to register as temporary residents under the hukou system of household registration.
Many struggle to fill in the required paperwork or to find the money for the fees and so end up living illegally in cities, the UK-based human rights group says.
Traditionally requires person to live in area they are registered in
Employment, housing and social benefits linked to Hukou
In 1950s, system classified people as either rural or urban residents
Dubbed the "peasant apartheid" for discriminating against rural migrants
Those who do manage to acquire temporary residency still face discrimination over housing, education, health care and employment, Amnesty adds.
"Millions of people from the countryside are going to cities to help build them up, most of the time by providing cheap labour," Corinna-Barbara Francis, Amnesty's China researcher, said.
"They work there and yet most never gain the right to stay."
This also applies to the children of migrant workers. A child may have spent their whole life in the city, yet will remain registered at the parents' village, Ms Francis adds.
'Largest peacetime migration'
Amnesty International found that the health care available to temporary residents in cities was "significantly inferior" to that on offer to permanent residents.
"Spending on urban health care... has become increasingly skewed in favour of already privileged groups," the report said.
Millions of migrant workers' children are also struggling to get a decent education, the report went on.
Millions more people are expected to migrate to cities in coming years
Many are effectively shut out of state schools because their parents are not legally registered, the school fees are too high or they fail to pass the necessary entrance exams.
Some schools specifically for migrant children are set up, often by the migrant community, but these are vulnerable to sudden "discriminatory" closures by local governments and offer lower quality education than state schools, Amnesty found.
"To date, there appears to be no reports of an internal migrant school having been officially licensed," the report said.
In the workplace, managers are taking advantage of the temporary status of workers to exploit them, Amnesty went on.
Migrant workers are typically owed back pay, which they lose if they quit; and are often deprived of their wages before the Lunar New Year period to ensure they return after the holiday.
"Such tactics allow managers to deal with the growing labour shortage without having to raise wages," Amnesty said.
The Chinese government has tried improve the situation for migrant workers, and has passed regulatory measures to improve their working and living conditions.
But Amnesty International says the government must act immediately to end all forms of discrimination against migrant workers.
In what has been described as "the world's largest ever peacetime migration", as many as 300 million Chinese could have made the move from country to city by 2015.