Rising income and wealth inequality in China

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areas in terms of income, social security, public services, reflecting government policies and political institutions di
Rising income and wealth inequality in China Li Shi Beijing Normal University

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1. Some features of income inequality in China.

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2. . Some features of wealth inequality in China.

1. Some features of Changes in income inequality in China l 

Increasing inequality in all the aspects

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1. Urban areas:

Gini 0.15 (1981) l  Dt /Db 4.4 (1988) l 

0.36(2011) 12 (2007)

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3. Entire China

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Gini

0.38 (1988)

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Dt /Db 13.3 (1988)

0.47 (2013) 23.3 (2007)

Changes in Gini coefficients in China as a whole, 1981-2012

4. Significant differences between urban and rural areas

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Significant differences between urban and rural areas in terms of income, social security, public services, reflecting government policies and political institutions discriminating against rural people.

Income ratio of urban and rural households

Importance of urban-rural income gap in total inequality in China Theil decomposition:

1988: 37%, 1995: 41%, 2002:46%, 2007: 51%。

Wealth Distribution in China

Wealth share by decile group Decile (Low to high)

Wealth Share / Urban

Wealth Share / Rural

Wealth Share / National

2002

2010

2002

2010

2002

2010

1

0.8

0.8

0.7

0.3

0.6

0.1

2

2.5

1.7

2.6

1.2

1.8

0.5

3

4.1

2.2

4.1

1.7

2.9

0.9

4

5.5

2.8

5.4

2.3

3.9

1.5

5

6.8

3.5

6.8

3.1

5.2

2.4

6

8.4

4.5

8.3

4.2

6.9

3.5

7

10.2

5.8

10.2

5.7

9.1

5.1

8

13.0

8.3

12.7

8.0

12.6

7.5

9

17.2

13.3

16.7

12.1

18.3

13.2

10

31.7

57.1

32.5

61.5

38.7

65.4

Widening wealth inequality in terms of Gini


ü Rural gini: from 0.453 to 0.709 ü Urban gini: from 0.450 to 0.659 ü National gini: from 0.537 to 0.758

Simulated results of wealth inequality in China National Wealth Inequality(Gini) 2002

2010

All samples

0.537

0.758

If top 1% deleted

0.511

0.677

If top 5% deleted

0.468

0.596

If bottom 1% deleted

0.532

0.754

If bottom 5% deleted

0.514

0.744

Housing prices and wealth inequality in China Wealth inequality (Gini) 2002 2010 2010年 (1) (2)(assume constant housing prices) (3) National 0.537 0.758 0.684

Changes in Gini during 2002-2010

Due to(%)

Housing other Prices ((3)-(1))/(4) (4)= (2)-(1) ((2)-(3))/ (4) 0.221

33.5

66.5

Urban

0.450

0.659

0.569

0.209

43.1

56.9

Rural

0.453

0.709

0.650

0.256

23.1

76.9

l Thanks