Yihuan Wang - Executive Director of Research Center for International Development, Professor, Assistant Dean of College of Humanities and Development, China Agricultural University, 100083, 17, Qinghua Donglu, Beijing, China; E-mail: wangyh@cau.edu.cn
Abstract
The presented paper discusses trends and causes of income inequality in China. The author also examines the influence of various forms of inequality in China on economic development and provides recommendations to reduce inequality. Despite rapid economic growth and increasing incomes of the country’s residents, Gini coefficient is still high and it has a negative impact on social stability. The author explores such forms of inequality as regional, gender, rural-urban inequality, inequality between industries as well as classes.
Income inequality between urban and rural population is increasing. Despite investments in the agricultural sector, emphasis is put on developing urban areas. As a consequence, incomes, education attainment, labour productivity of rural residents are lower compared to the urban population.
The author also discusses unbalanced regional development: the eastern China regions earn more compared to the western and central regions as the result of beneficial location and government policies aimed at developing the eastern regions.
Inequality growth negatively affects China’s economy, reducing domestic demand and hindering reforms of the economic structure. If not controlled the expanding income gap can seriously undermine the fairness and justice of society, having a negative impact on social development and stability, and damaging the construction of a harmonious society.
To reduce inequality it is recommended to establish a system in which distribution according to work input is dominant and multiple forms of distribution coexist; to strengthen the government macro-control; and to change rural-urban dual economic structure. Such tools as tax incentives, cultivating entrepreneurs’ sense of social responsibility should also be employed.
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Citation:
Wang Y. (2013) Kitai [China] INTERNATIONAL ORGANISATIONS RESEARCH JOURNAL, 3 (in Russian)
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