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The Distribution of Household Income in China: Inequality, Poverty and Policies*

Published online by Cambridge University Press:  27 March 2014

Shi Li  and
Terry Sicular
Shi Li
Affiliation:
Beijing Normal University. Email: lishi@bnu.edu.cn.
Terry Sicular*
Affiliation:
University of Western Ontario.
*
Email: sicular@uwo.ca (corresponding author).
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Abstract

This article examines recent trends in inequality and poverty and the effects of distributional policies in China. After a discussion of data and measurement issues, we present evidence on national, as well as rural and urban, inequality and poverty. We critically examine a selection of policies pursued during the Hu–Wen decade that had explicit distributional objectives: the individual income tax, the elimination of agricultural taxes and fees, minimum wage policies, the relaxation of restrictions on rural–urban migration, the minimum living standard guarantee programme, the “open up the west” development strategy, and the development-oriented rural poverty reduction programme. Despite these policies, income inequality in China increased substantially from the mid-1990s through to 2008. Although inequality stabilized after 2008, the level of inequality remained moderately high by international standards. The ongoing urban–rural income gap and rapid growth in income from private assets and wealth have contributed to these trends in inequality. Policies relaxing restrictions on rural–urban migration have moderated inequality. Our review of selected distributional policies suggests that not all policy measures have been equally effective in ameliorating inequality and poverty.

Keywords

inequalitypovertyChinaGini coefficienthousehold surveysdistributional policy
Type
Articles
Information
The China Quarterly , Volume 217 , March 2014 , pp. 1 - 41
Copyright
Copyright © The China Quarterly 2014 

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Footnotes

*

Support from the International Development Research Council, Centre for International Governance Innovation, and Ontario Research Foundation is gratefully acknowledged.

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