## Two Sides of the Same Coin? Rebalancing and Inclusive Growth in China

_IMF Working Papers, August 27, 2013_

## Source details

**Canonical URL:** [Two Sides of the Same Coin? Rebalancing and Inclusive Growth in China](https://www.imf.org/en/publications/wp/issues/2016/12/31/two-sides-of-the-same-coin-rebalancing-and-inclusive-growth-in-china-40893)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/two-sides-of-the-same-coin-rebalancing-and-inclusive-growth-in-china-40893/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/two-sides-of-the-same-coin-rebalancing-and-inclusive-growth-in-china-40893/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/two-sides-of-the-same-coin-rebalancing-and-inclusive-growth-in-china-40893/bundle-manifest.json)

## Bibliographic details
- Authors: Il Houng Lee, Murtaza H Syed, Xin Wang
- Published: August 27, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484386576.001

---

### Main findings: drivers of rising inequality
- The paper applies the Shapley Value decomposition technique to assess factors behind the rise of inequality in China.
- Inequality "may have been an inevitable by-product of China’s investment and export-led growth model."
- Between Chinese households, the most important factors explaining income inequality are:
  - location
  - education
  - access to health insurance
  - labor market variables, including the sector of employment and enterprise size
- Across China’s provinces, divergences in per capita incomes are driven by:
  - the relative level of capital-intensity
  - public spending
  - financial access
  - privatization
  - urbanization
- Excess liquidity may have exacerbated inequality in the last decade by driving up property prices and the wealth gap.

### Policy recommendations to broaden the benefits of growth
- Maintain prudent monetary and credit policies.
- Implement a more progressive fiscal tax and expenditure system.
- Increase public spending on health and education.
- Undertake deregulation and reforms to increase competition.
- Adopt measures to raise labor incomes and assist vulnerable workers.
- Improve access to finance for both households and SMEs, including in rural areas.
- Note: many of these reforms overlap with measures that would help rebalance the economy toward consumption and household incomes.

### Publication and metadata
- Title: Two Sides of the Same Coin? Rebalancing and Inclusive Growth in China
- Authors: Il Houng Lee, Murtaza H Syed, Xin Wang
- Date: August 27, 2013
- Series: Working Paper No. 2013/185
- Issue: 185
- Volume: 2013
- Pages: 24
- DOI: https://doi.org/10.5089/9781484386576.001
- Stock No: WPIEA2013185
- ISBN: 9781484386576
- ISSN: 1018-5941

*Source: Two Sides of the Same Coin? Rebalancing and Inclusive Growth in China, IMF Working Papers 2013/185 (August 27, 2013).*

---

## Content in this bundle

- **_wp13185**
  - [_wp13185 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2013/_wp13185.pdf.md){rel="alternate" type="text/markdown"}
  - [_wp13185 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2013/_wp13185.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/two-sides-of-the-same-coin-rebalancing-and-inclusive-growth-in-china-40893_