The Great Chinese Inequality Turnaround

29 Pages Posted: 5 May 2017

See all articles by Ravi Kanbur

Ravi Kanbur

Cornell University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Yue Wang

Cornell University, Department of Economics, Students

Xiaobo Zhang

International Food Policy Research Institute (IFPRI)

Multiple version iconThere are 4 versions of this paper

Date Written: May 2, 2017

Abstract

China’s high income and wealth inequality has long attracted the interest of policymakers and re-searchers, yet surprisingly little has been done since 2010 on inequality trends. Given China’s evolving economic structure and the government’s adoption of new policy tools in recent years, we revisit the latest data on Chinese inequality and assess the impacts of economic and policy changes on income distribution. After a quarter century of rapid, sustained increase, we see Chinese inequality plateauing and even diminishing. To verify this finding, we draw upon a range of data sources and measures of inequality. We examine inequality trends through decomposition by income source and population subgroups, and consider possible explanations such as policy shifts and structural trans-formation of the Chinese economy. The findings suggest that the narrative on Chinese inequality today should focus on clarifying the factors driving this apparent inequality turnaround.

Keywords: Chinese inequality turnaround, inequality data, inequality trends, inequality and structural transformation, harmonious development, government policy

JEL Classification: D31, D63, O15, O53

Suggested Citation

Kanbur, Ravi and Wang, Yue and Zhang, Xiaobo, The Great Chinese Inequality Turnaround (May 2, 2017). BOFIT Discussion Paper No. 6/2017. Available at SSRN: https://ssrn.com/abstract=2962268

Ravi Kanbur (Contact Author)

Cornell University ( email )

301-J Warren Hall
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607-255-9984 (Fax)

HOME PAGE: http://www.kanbur.dyson.cornell.edu

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Yue Wang

Cornell University, Department of Economics, Students ( email )

Ithaca, NY
United States

Xiaobo Zhang

International Food Policy Research Institute (IFPRI) ( email )

2033 K Street, NW
Washington, DC 20006
United States
202-862-5677 (Phone)
202-467-4439 (Fax)

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