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If you stay in China for more than a few days, you will hear references to the 'PSB' a lot. The PSB stands for "Public Security Bureau", essentially a state Police organization, that manages a variety of things from public safety to Visas to local registrations to allowing you to enter, or more importantly, exit the country.
The Chinese have been doing this since the Ming Dynasty. It's not going to change anytime soon.
 
Foreigners arriving in China need to register at their local police station within 24 hours of arrival (a 72-hour limit is given to individuals staying in 'remote' suburbs of Shanghai). Registration is a prerequisite with the PSB Exit-Entry Division, an Application for a new visa, stay certificate, residence permit or departure from China.
 
This applies whether you are in China as a tourist, student or even as a worker with a residency permit. It may seem invasive, imposing, bureaucratic or simply a bore to do, and arguably it is – but it's also very important, and not Doing it will cost you both time and money, so do it.
 
If staying in a nationally recognized hotel (typically 3 star or greater), the hotel staff will register with your passport during check–in process – you may not even notice it's being done for you.
 
Everyone else needs to register at their local police station within 24 hours after arrival.
 
Police registration is not a one-time thing - it is necessary to renew your registration each time you spend more than 24 hours in a place different from your registered address, re-enter the country, obtain passport renewal, and after every visa extension. Once you are registered, you will have a 'temporary residence registration form' that you should keep with you at all times.

If you do not register, you will be subject to a fine, or worse, when trying to exit China at airport, you will be detained.
 
It's not only the law, but it's a good idea to carry at least a copy of your passport photo page, visa, and Registration Form of Temporary Residence with you at all times.