Inequality in China – Trends, Drivers and Policy Remedies

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

No 2018/127, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; income share; inequality in China; per-capita income; income inequality; China; structural change; fiscal policy; guarantee system; policy variable; Policy remedy; net Gini coefficient; poverty alleviation policy; household income; government policy; market Gini coefficient; policy reform; Income distribution; Personal income; Southeast Asia (search for similar items in EconPapers)
Pages: 31
Date: 2018-06-05
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Citations: View citations in EconPapers (14)

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