When you first arrive in China, you must register with the police within 24 hours of your arrival.
The most obvious reason is because it is the law. Not doing so could result in penalties ranging anywhere from a stern reprimand to a 2000 yuan fee. Additionally, if you need police assistance and have not registered, they will refuse to issue you a certificate.
Registering with the police is necessary to get your Registration Form of Temporary Residence, which is required documentation and can be checked by police at any time. If, during one of these checks, you do not have it, you may be subjected to one of the aforementioned penalties.
The registration process is generally simple and pain-free. While the process does vary slightly by region, below are documents required more or less across the board:
Please note that there may be some local variations in procedures. Also note that registration should not cost anything. Finally, it can be helpful to have a Chinese friend or your landlord along when you register.
To register, go to the nearest PSB (Public Security Bureau). Make sure to bring the documents listed above. The PSB is open on weekends.
Note that if you are staying at a hotel, they will do this for you.