Understanding Income Inequality in China: A Multi-Angle Perspective

Economic reforms have brought about spectacular growth and vast improvements of people’s living standards in China since 1978. In the meantime, unbalanced regional growth and income inequality have become two important concerns of future development. Most available studies on income distribution have either focused on the rural population or on the urban citizens. This paper stresses the importance of adopting a multi-angle approach to fully understand income inequality in China. We first use some top-down information to form a general picture of inequality for the whole country, and then use some bottom-up household survey data to explain in detail the development of inequality over time regarding rural/urban inequality, rural inequality, urban inequality and inter-regional inequality, the relative importance of different income sources to overall inequality. This revised version was published online in July 2006 with corrections to the Cover Date.