Inequality in China – Trends, Drivers and Policy Remedies

By Sonali Jain-Chandra, Niny Khor, Rui Mano, Johanna Schauer, Philippe Wingender, Juzhong Zhuang

June 5, 2018

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Format: Chicago

Sonali Jain-Chandra, Niny Khor, Rui Mano, Johanna Schauer, Philippe Wingender, and Juzhong Zhuang. Inequality in China – Trends, Drivers and Policy Remedies, (USA: International Monetary Fund, 2018) accessed October 6, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

China has experienced rapid economic growth over the past two decades and is on the brink of eradicating poverty. However, income inequality increased sharply from the early 1980s and rendered China among the most unequal countries in the world. This trend has started to reverse as China has experienced a modest decline in inequality since 2008. This paper identifies various drivers behind these trends – including structural changes such as urbanization and aging and, more recently, policy initiatives to combat it. It finds that policies will need to play an important role in curbing inequality in the future, as projected structural trends will put further strain on equity considerations. In particular, fiscal policy reforms have the potential to enhance inclusiveness and equity, both on the tax and expenditure side.

Subject: Education, Fiscal policy, Income distribution, Income inequality, National accounts, Personal income

Keywords: China, Fiscal policy, Government policy, Guarantee system, Household income, Income distribution, Income inequality, Income share, Inequality in China, Market Gini coefficient, Net Gini coefficient, Per-capita income, Personal income, Policy reform, Policy remedy, Policy variable, Poverty alleviation policy, Southeast Asia, Structural change, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/127
Stock No:

WPIEA2018127
ISBN:

9781484357538
ISSN:

1018-5941

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