China is experiencing an increase in socioeconomic inequality in comparison to the global trend. Employing the hukou registration as a focal point, this study seeks to examine social capital differences between developed and underdeveloped regions in China. As the data for the analysis were from the China Family Panel Studies, social capital was measured by social trust, participation, and networks. The Gini coefficient, a measure of economic inequality, was calculated for 25 different provinces in China in this paper. In light of the fact that these are panel data collected between 2014 and 2018, this study employed the random-effect model for panel analysis. The first finding is that individuals, in an environment characterized by high levels of economic inequality, have low levels of social capital levels in China. Second, the inverse relationship between economic inequality and social capital varies according to social capital element. Specifically, this inverse relationship was observed in social trust and social networks, but not in social participation. Third, hukou registration moderated the inverse relationship between economic inequality and social capital. The rural hukou registration revealed a stronger inverse relationship between economic inequality and social capital than its urban counterpart. This indicates that the negative impact of economic inequality on social capital resulted in additional inequality among rural hukou holders.