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China's higher education expansion policy implemented in 1999 has substantially increased higher education opportunities. This paper investigates whether rural students do benefit more from the expansion policy and achieve educational equity between urban and rural areas. Based on the four waves of nationwide micro survey data, collected in 2000, 2005, 2010 and 2015, we find that the expansion policy increases the rural-urban gap in higher education participation in the short- and medium-term, but reduces the educational inequality in the long-term. However, when we examine the impact of the expansion policy on access to elite higher education, the results show that the expansion policy is not conducive to reducing the rural-urban gap in elite higher education participation. Therefore, to achieve educational equity between rural and urban areas, compensation policies should be designed to benefit rural students. [ABSTRACT FROM AUTHOR]