Inequality in China – Trends, Drivers and Policy Remedies

IMF Working Papers, June 5, 2018

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Inequality in China – Trends, Drivers and Policy Remedies

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Bibliographic details

• Authors: Sonali Jain-Chandra, Niny Khor, Rui Mano, Johanna Schauer, Philippe Wingender, Juzhong Zhuang
• Published: June 5, 2018
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781484357538.001

Summary and central findings

• China experienced rapid economic growth over the past two decades and is on the brink of eradicating poverty.
• Income inequality increased sharply from the early 1980s and rendered China among the most unequal countries in the world.
• Inequality has experienced a modest decline since 2008.
• The paper identifies drivers of these trends, including structural changes and recent policy initiatives to combat inequality.
• 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.
• Fiscal policy reforms have the potential to enhance inclusiveness and equity, both on the tax and expenditure side.

Drivers of inequality identified

• Structural changes such as urbanization and aging.
• Policy initiatives implemented more recently to address inequality.
• Interaction between rapid growth, structural transformation, and policy settings determining income distribution dynamics.

Policy implications and recommended areas for reform

• Fiscal policy reforms on both the tax side and the expenditure side are highlighted as having potential to enhance inclusiveness and equity.
• Continued and targeted policy initiatives are implied as necessary because projected structural trends will exacerbate equity pressures.

Publication and document metadata

• Title: Inequality in China – Trends, Drivers and Policy Remedies
• Authors: Sonali Jain-Chandra, Niny Khor, Rui Mano, Johanna Schauer, Philippe Wingender, Juzhong Zhuang
• Date: June 5, 2018
• Series: Working Paper No. 2018/127
• Issue: 127
• Volume: 2018
• Pages: 31
• DOI: https://doi.org/10.5089/9781484357538.001
• Stock No: WPIEA2018127
• ISBN: 9781484357538
• ISSN: 1018-5941
• Subjects: 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

IMF Working Paper — "Inequality in China – Trends, Drivers and Policy Remedies", Working Paper No. 2018/127 (June 5, 2018).

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