I dont think that 700M rural population is a bit exaggerated but very real and necessary be real!
In 1970 when Deng Xiaping met then HK govonor MacLeod in Beijiang the first time, Deng whispered Mac: If you think ruling Hong Kong is difficult, try China! There was a laugh from Mac....But that joke wasnt bad, instead it has reflected the real nature of China. If those 700milion Chinese were living in urban areas, all of them were intellectuals and elites and they were expecting a high standard living
then who is going to do those farming jobs? And where is the economy that required low skills, simple and tired jobs like factory workers, coal mining,fishing...etc.