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A Pause in the Growth of Inequality in China?

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  • Richard Herd
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    Abstract

    In recent years, policymaking in China has put increasing emphasis on stemming the growth in inequality, which had been fairly steep since the 1980s. Policy action has taken the form of regional development measures and of reforms of various aspects of the social safety net broadly defined. The Western Development Plan has aimed at narrowing the income gap between the sparsely populated and under-developed West and the more prosperous and faster-growing East. The bulk of the expenditure, however, has been on large capital-intensive projects rather than on education and other social spending. More emphasis on education would help reduce the income gap, since human capital is a key determinant of income. Government policies to improve conditions in rural areas nationwide have involved a substantial reduction in the burden of regressive taxes and fees. Welfare assistance has also evolved: a minimum living allowance has been introduced in urban and more recently in rural areas, but it has not reduced poverty that much, not least because of how it is administered. Moreover, the financing of this allowance ought to rely more on national solidarity and its delivery needs to be better co-ordinated with that of other social benefits. A set of new indicators of nationwide inequality, based on household survey data, suggests that overall inequality has ceased to increase in recent years, and may even have inched down. Alternative measures of income inequality across provinces show that, if migration is taken into account, disparities are markedly less, and have tended to decline somewhat in recent years. Even so, geographical inequality remains very high by international standards. It reflects intra- more than inter-provincial differences, pointing to persistent, if diminishing, labour market segmentation. Une pause dans le creusement des inégalités en Chine ? Ces dernières années, la volonté d’endiguer l’accentuation des inégalités, qui tendaient à se creuser depuis les années 1980, a pris une place grandissante dans les grandes orientations chinoises. L’action publique s’est traduite par des mesures de développement régional et des réformes de divers aspects du filet de sécurité sociale au sens large. La stratégie de mise en valeur de l’Ouest a visé à réduire l’écart de revenu entre cette partie du pays peu peuplée et insuffisamment développée et l’Est plus prospère où la croissance est plus rapide. Toutefois, les dépenses ont, pour l’essentiel, privilégié les grands projets à forte intensité de capital par rapport à l’éducation et à d’autres préoccupations sociales. Un recentrage sur l’éducation contribuerait à réduire les disparités en termes de revenu, celui-ci étant largement déterminé par le capital humain. Les politiques menées par le gouvernement pour améliorer la situation des campagnes dans tout le pays ont veillé à alléger sensiblement le poids des impôts et prélèvements régressifs. L’aide sociale a également évolué : une garantie de minimum vital a été instaurée dans les zones urbaines puis, il y a peu, dans les zones rurales, sans pour autant faire véritablement reculer la pauvreté, ne serait-ce qu’en raison de ses modalités administratives. Par ailleurs, le financement de cette garantie de minimum vital devrait reposer davantage sur la solidarité nationale, et une coordination plus étroite s’impose avec l’attribution d’autres prestations sociales. D’après un ensemble de nouveaux indicateurs nationaux, conçus à partir de données d’enquêtes sur les ménages, les inégalités globales n’augmentent plus depuis quelques années ; peut être même ont-elles diminué. Il ressort d’autres mesures des inégalités de revenu entre provinces que si les migrations entrent en ligne de compte, le fossé est nettement moins grand, et tend à se combler quelque peu. Les inégalités géographiques n’en restent pas moins très fortes par rapport aux normes internationales. Le phénomène s’explique par des différences plus intra qu’interprovinciales, et renvoie à une segmentation du marché du travail persistante, bien qu’elle aille en s’estompant.

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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 748.

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    Date of creation: 01 Feb 2010
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    Handle: RePEc:oec:ecoaaa:748-en

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    Keywords: human capital; education; migration; social assistance; hukou; poverty; China; income inequality; labour market segmentation; segmentation du marché du travail; hukou; capital humain; inégalité des revenus; migration; assistance sociale; pauvreté; Chine; éducation;

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    Cited by:
    1. Lee, Jongchul, 2013. "A provincial perspective on income inequality in urban China and the role of property and business income," China Economic Review, Elsevier, vol. 26(C), pages 140-150.

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