The Great Chinese Inequality Turnaround

32 Pages Posted: 23 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)

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Date Written: May 3, 2017

Abstract

The high level of inequality in China has been a focus of interest for policy makers and researchers. However, few studies have evaluated the trend since 2010. With changes in the economic structure and new policy tools introduced in recent years, a revisit of Chinese inequality should give us the latest information about its evolution and the impacts of these economic and policy changes on income distribution. This paper argues that after a quarter century of sharp and sustained increase, Chinese inequality is now plateauing and even turning down. The argument is made using a range of data sources and a range of measures and perspectives on inequality. The evolution of inequality is further examined through decomposition by income source and population subgroup. Some preliminary explanations are provided for these trends in terms of shifts in policy and the structural transformation of the Chinese economy. The narrative on Chinese inequality now needs to focus on the reasons for this great turnaround.

Keywords: Chinese Inequality Turnaround, Inequality Data, Inequality Trends, Inequality and Structural Transformation, Harmonious Development and Government Policy

JEL Classification: D31, D63, O15, O53

Suggested Citation

Kanbur, Ravi and Wang, Yue and Zhang, Xiaobo, The Great Chinese Inequality Turnaround (May 3, 2017). IFPRI Discussion Paper 1637. Available at SSRN: https://ssrn.com/abstract=2972273

Ravi Kanbur (Contact Author)

Cornell University ( email )

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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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