Mind the Gaps: A Political Economy of the Multiple Dimensions of China’s Rural-Urban Divide

BWPI Working Paper No. 152

25 Pages Posted: 1 Jul 2011

See all articles by Xiaobing Wang

Xiaobing Wang

The University of Manchester - Economics - School of Social Sciences and Centre for Chinese Studies

Jenifer Piesse

University of Stellbosch; King's College London - Department of Management

Nick Weaver

University of Manchester - Economics - School of Social Sciences

Date Written: June 2011

Abstract

China’s impressive growth has been accompanied by increasing inequality and a widening rural–urban divide. This paper identifies and examines nine major dimensions of this divide: income,consumption, education, healthcare, employment, child care, pensions, access to public services and environment. The paper attributes the main causes of the rural–urban divide to China’s development strategy and the associated regressive tax and subsidies policies. This paper is among the first to evaluate and decompose the rural–urban divide into multiple dimensions or gaps, and highlights the severe constraints on the Chinese peasantry. It discuses the policy and welfare implications of the rural–urban divide. It argues that the large size of the rural–urban divide was mainly due to inequality in opportunities and the lack of social provision of public goods in rural areas. The removal of discriminatory policies, including the provision of such public goods, will lead to greater equality of opportunity and a reduced gap. Increased equality and efficiency can be achieved simultaneously.

Keywords: poverty, income inequality, rural–urban divide, China

Suggested Citation

Wang, Xiaobing and Piesse, Jenifer and Weaver, Nick, Mind the Gaps: A Political Economy of the Multiple Dimensions of China’s Rural-Urban Divide (June 2011). BWPI Working Paper No. 152, Available at SSRN: https://ssrn.com/abstract=1876488 or http://dx.doi.org/10.2139/ssrn.1876488

Xiaobing Wang (Contact Author)

The University of Manchester - Economics - School of Social Sciences and Centre for Chinese Studies ( email )

Arthur Lewis Building
Oxford Road
Manchester, M13 9PL
United Kingdom

Jenifer Piesse

University of Stellbosch

Stellenbosch, Western Cape
South Africa

King's College London - Department of Management ( email )

Virginia Woolf Building
22 Kingsway
London, England WC2B 6NR
United Kingdom

Nick Weaver

University of Manchester - Economics - School of Social Sciences ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

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