Wealth Accumulation and Distribution in Urban China

Xin Meng ()

No 2553, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Under socialism it was neither possible nor necessary to accumulate significant levels of personal wealth. The acceleration of economic reform in the last decade, however, has brought dramatic increases in income and investment opportunities. Reform has also reduced social protections provided by the state welfare system. In response to these changes, between 1995 and 2002, urban average real household net total wealth increased by 24 per cent per annum. There is a concern, however, that those accumulating wealth are the economic and political elites while those unable to accumulate wealth are the most vulnerable workers who are losing social protection. Using Chinese urban survey data of 1995, 1999, and 2002, this paper investigates this issue. It is found that households with above average income have accumulated more wealth than their poorer counterparts. In addition, a large proportion of this wealth accumulation may be from non-earned sources, such as buying larger and better housing at highly subsidized prices. Furthermore, party members and their children have benefited a great deal from this fast wealth accumulation process. Although at lower rates, the poor and vulnerable have also been able to accumulate wealth.

Keywords: wealth; distribution; China (search for similar items in EconPapers)
JEL-codes: D31 I30 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2007-01
New Economics Papers: this item is included in nep-cna, nep-dev and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published - published in: Economic Development and Cultural Change, 2007, 55 (4), 761-791

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Journal Article: Wealth Accumulation and Distribution in Urban China (2007)
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